Buying your first home is exciting, but it can also be a financial drainer you weren’t ready for. Being aware of the various costs you may incur can help you to plan accordingly. Typically, the extra costs can be as much as 10% of the purchase price of your home. You need to keep that in mind as you are looking for a place to buy.
Fees and Taxes
There is a Stamp Duty which will apply when you buy a home. This amount is based on the purchase price of the property. It will also depend on the location where you reside. It is going to be one of the largest fees you will have when you buy a home. A registration fee can apply too for the transferring of the documents associated with that property. The costs also depend on where you reside.
Loan Related Costs
Your lender may have various fees and costs they add on for the loan too. This can include a settlement fee, service fees, and establishment fees. If you get a fixed rate locked in, there may be fees for that too. When you borrow 80% or more of the cost of the home, you will need LMI which is Lender’s Mortgage Insurance. The amount depends on the overall cost of your loan for the home you purchase.
Other Possible Fees
There are a variety of other possible fees that could apply when you buy your first home too. For example, you may incur legal fees for the transfer of the property from the previous owner to you. There may be fees involved to make sure there aren’t any other liens on the property too. A title search is conducted and there will be costs involved with the inspections for the home. These are to verify the structure is sound and pest free before you buy it. You will also need to have the utilities turned on at the new property. There may be transfer fees that apply from your previous location.
Covering the Costs
Save what you can when you know you are looking to buy a home. Any money you may get such as bonuses or what you don’t need for your basic living costs, could be put aside for savings. Look at incentives and rebates offered which you may qualify for as a first time home buyer too. They can reduce the amount of money you need to come up with out of your own pocket to buy a home.